Campaign Report - European Media - Newspapers not dead yet - Faced with worldwide decline in circulation and increased competition from other media, Richard Cook finds European publishers embracing innovation to maintain market share

The international newspaper business is in decline. However you dress up the figures, the story is the same. In Europe, the US and Japan, readership figures are retreating and the number of titles published is in decline. It’s a global story that is being played out in different markets in different economic climates to different degrees. But nowhere is this trend more virulently pronounced - or more stubbornly resisted - than in the older markets of the European Union, and its regionally-based newspaper markets of Austria, Finland, Germany and Switzerland.

The international newspaper business is in decline. However you

dress up the figures, the story is the same. In Europe, the US and

Japan, readership figures are retreating and the number of titles

published is in decline. It’s a global story that is being played out in

different markets in different economic climates to different degrees.

But nowhere is this trend more virulently pronounced - or more

stubbornly resisted - than in the older markets of the European Union,

and its regionally-based newspaper markets of Austria, Finland, Germany

and Switzerland.

’Press remains, in most countries in Europe, a mature business that has

conceded market share to television,’ points out Jonathan Barnard, a

market analyst at Zenith Research, ’and so while newspaper advertising

across Europe actually rose by 5 per cent last year, that increase still

underperformed the advertising market as a whole.’

But within that snapshot of, at best, a mature market and, at worst, one

suffering from continual erosion of readership, is a more complicated

picture; not least in terms of ad revenue itself. For a start, the

changes happening throughout the EU are by no means homogeneous.

Newspapers operate from considerably different positions of strength or

weakness within their individual markets. They represent just 12 per

cent of the total display ad revenue market in Portugal, for example,

where TV, on the other hand, accounts for 57 per cent. Yet in Denmark

that story is almost completely reversed. Newspapers there continue to

speak for 70 per cent of the advertising cake, while TV revenue has

barely crept past a fifth.

It might be expected that countries like Denmark, Sweden and Germany,

with the highest historic newspaper penetration, would be the ones to

suffer the more substantial declines, as the penetration of other forms

of media increases and readers inevitably ebb away. And sure enough that

is what - for the most part - has happened. But individual newspapers in

the countries concerned have not accepted overall decline as an

inevitability and have instead adopted an impressive range of tactics

and techniques to strike back, as their own individual experiences and

opportunities dictate.

Take Norway, for example. Television accounts for only an 18 per cent

share of total Norwegian advertising expenditure. Press, on the other

hand, takes a 60 per cent share. The explanation for this state of

affairs is simple enough. Norway had no conventional commercial TV until

1992, when the private station, TV2, was licensed. The state

broadcaster, NRK, was then a one-channel operation, reliant for funding

on a government subsidy and public licence fee. Since TV2’s launch, it

has managed to build up a 30 per cent share of viewing.

In the absence of any well-established terrestrial option, advertisers

have had to bank on a growth in cable and satellite TV services to

provide them with the competition to newspapers and the coverage they

need. Although satellite dish penetration is low at 17 per cent, cable

is received in 42 per cent of Norwegian homes. But TV stations have

played into newspapers’ hands by being less than flexible in price,

despite the so far disappointing ratings.

’Cost per thousand on Norwegian TV is the highest in Europe,’ explains

Saatchi & Saatchi’s Oslo general manager, Helle Lauvstad. ’We are the

lead agency for P&G in Scandinavia and it is extremely concerned about

the high cost of TV advertising, which is of course one fact that has

been especially good news for newspapers.’

The press market in Norway is dominated by the dailies: Verdens Gand,

which claims a readership of 1.3 million, more than a quarter of the

entire population, Aftenposten and Dagbladet. In total, more than 175

newspapers are printed in more than 130 different centres. But the

papers themselves haven’t relied on confusion in the TV market or indeed

merely on undercutting on ratecard, to prosper.

Aftenposten, a quality Oslo daily, claims a circulation of 283,000 and a

readership of 810,000 for its broadsheet morning edition and also

produces a tabloid afternoon version which sells around 188,000. But the

upmarket paper started to come under threat after two local papers were

launched and, worse by far, a local TV station. ’We had to prepare and

defend our franchise,’ the paper’s ad director, Pil Overby, points


His initial solution was to give away an extra 110,000 copies on

Wednesday afternoons to extend the paper’s reach into Oslo’s main

shopping areas. The other main prong to the paper’s defence was to

launch new advertising products to help defend its crucial classified ad

revenue. In fact, around 61 per cent of the paper’s revenues derive from

this source, with two key categories - recruitment and real estate -

being the most important. Overby produced two weekly advertising

supplements that were also intended to be distributed by the paper’s

delivery force to non-subscribers in the Oslo area. In essence the

products were intended to work as bonuses to reward existing loyal

advertisers. All ads that had appeared twice in a week are automatically

put into the supplements while Overby offers a deal whereby advertisers

can buy a second insert at a reduced price in the regular paper,

including a place in the new products which go to the


The paper, like others across Europe, has also benefited by investing in

an enhanced in-house art department to encourage advertisers to buy

larger and non-standard ad spaces. Largely as a result, the average ad

size in Aftenposten almost doubled in size to 116cm in real estate

between 1995 and 1997 while the size of recruitment ads also increased

by a third over the same period.

In most markets outside Scandinavia, where TV is the dominant medium,

newspapers are struggling against a range of other media for ad


However, their battle is often most intense with below the line.

Advertising categories that have traditionally been important revenue

generators for the press, like retail, have increasingly sought refuge

in the arms of below-the-line advertising in recent years, with its

greater accountability and tighter targeting.

The answer for newspapers, at least in some innovative markets, has been

to borrow techniques from below-the-line initiatives and so enable their

own advertisers to talk to tightly segmented portions of the newspaper’s

overall readership.

The French regional newspaper, L’Alsace,is already slightly unusual in

that it produces no fewer than 11 regular editions of its daily title,

as well as three bilingual ones to cater for the French and German

populations of the ethnically diverse Alsace region. In fact, partly in

response to the contentious history of the region, the paper is only

called L’Alsace in the north and centre of its region, while it is known

as Le Pays in the south.

It first invested in inserting technology as far back as 1972 and has

refined its offering ever since. It is helped by the fact that 88 per

cent of its average 142,500 sales is made by subscription, while 79 per

cent of these are supplied by home delivery, carried out by a delivery

force of 950 people over 35 routes. For advertisers, this system means

that they are not reliant on the newsagent remembering to package up all

the supplements with the paper, while the opportunities for tighter

targeting are also greater. L’Alsace has long offered a TV guide, TV

Hebdo, as part of the package and now also binds in the women’s

magazine, Femina Hebdo.

But the real benefit of its state-of-the-art technology is in helping

advertisers target their inserts more effectively and in helping itself

compete with below-the-line activities. In fact L’Alsace currently gets

8 per cent of its revenue from inserts, while important retail clients

like the supermarket, Leclerc, diverts a third of its total spend with

the paper on inserts. ’We’re taking market share away from

below-the-line budgets,’ explains L’Alsace’s advertising director, Loic

Guinchard. ’Moreover the value of this below-the-line activity is

enhanced by its association with the newspaper.’

There are three inserts for each of the 11 regular editions, a total of

33 each day. And because every edition has a complementary distribution

to non-subscribers’ mailboxes, advertisers get the chance to talk to

non-readers. Crucially, though, they know exactly who they are reaching.

One edition, for example, around the town of Altkirch, sells 12,500

copies and is distributed to another 7,800 households in the area within

the next three days. According to studies by L’Alsace and collated by

the World Association of Newspapers, the combination of subscriber

distribution and complementary mailboxes give the paper a 94 per cent

coverage in its distribution area.

But then France has long been one of Europe’s leaders in inserting

technology, largely as a result of the upgrades publishers made to

plants in the early 70s to accommodate the extensive TV guides,

syndicated throughout the French press. But aside from listings

magazines, the French press had fared much less well than other markets

at launching successful supplements - an essential weapon in any

newspaper’s armoury.

The high-profile daily Liberation’s decision to launch a Saturday

magazine in 1994 was an ignominious failure, lasting just five months,

while France’s best known title, Le Monde, has never dared to launch a

supplement. All that is changing now, though, and largely through the

efforts of the newspaper and magazine publishers, Hersant and Hachette.

Hersant, which publishes the conservative daily, Le Figaro, and the

tabloid evening title, France Soir, brought out Le Figaro magazine in

1978 and Madame Figaro in 1980.

These two titles have been the only really successful newspaper

supplements in France - even if in truth they are regarded more as

stand-alone magazines by both readers and advertisers. Both claim

circulations in excess of half a million compared to the daily average

of around 320,000 recorded by the newspaper itself.

These successes have been joined more recently by the women’s weekly

magazine, Femina Hebdo, launched by Hachette almost two years ago. The

title was first distributed as a supplement in the daily La Provence and

the weekly Le Journal du Dimanche and then last year its distribution

was increased to take in other important regional dailies such as

L’Alsace, La Montagne and the Courier Picard. Hachette is expecting

readership to top two million by the end of the year and believes that

the title could ultimately go on to distribute as many as the TV guides,

more than four million copies, pushing it into competition for

advertising expenditure with a fragmenting TV marketplace.

On a more modest scale is the decision by one of France’s more

successful regional titles, Le Parisien, to press ahead with its own

plans to launch a Saturday magazine. The paper has seen its circulation

improve from 370,000 in 1990 to 466,000 in 1997 without making a single

promotion. It has done this by re-inventing itself as a de-politicised

paper with a strong emphasis on sport. It employs 30 sports journalists

out of a total staff of 200 and according to its editor-in-chief, Noel

Couedel, now gives a fifth of its editorial space to sports stories.

And there are other encouraging stories elsewhere across Europe. German

publishers, for instance, are trying to solve the problem of a declining

readership of young people by launching supplements aimed specifically

at them. They are investing heavily in design and editorial for these

products. The Waz group’s Cocktail youth supplement is distributed in

its four Northrhein regional dailies, for instance, including the

600,000 circulation Westdeutsche Allgemeine Zeitung, while other

publishers have produced supplements on subjects as diverse as holidays

and computer games.

Not many titles have had to go quite as far in the quest for readers,

though, as the Barcelona daily El Periodico de Catalyuna. For some

years, the title has been distinguished principally by its voracious

appetite for sport. For example, on Mondays the general news section of

the paper is inserted inside the sports section and not the other way


But the paper now has another more substantial point of difference. At

the end of last year it invested around pounds 6 million in setting up

another identical edition, except this one was written entirely in

Catalan and given a blue masthead as opposed to the traditional red

Castilian one.

Circulation has increased by 15,000 copies - to around 226,000 - of

which around 40 per cent are for the Catalan version. Journalists can

write in whatever language they choose and advertisers communicate in

either language, although the ads run in both newspapers. Around 50 per

cent of display ads are now published in both languages and 80 per cent

of classified, despite the fact that 80 per cent of the paper’s

advertising clients are based outside of Catalonia. According to the

advertising director, Francisco Pretel, he was able to boost rates by 5

per cent because of the circulation lift, while ad revenues overall are

up by 20 per cent this year, the first of the dual language scheme.

The newspaper business may be in decline across Europe, as around the

world, but this glib claim can hardly be made for all newspaper